Residents watch the demolition of a house in the Da Shi Lan as the area’s overcrowded streets are made ready for new tower blocks. Photograph: Dan Chung

As a vociferous cheerleader for the environment and certain types of classical architecture, Prince Charles has never been afraid of a challenge.

But even he might struggle in his latest attempt to encourage a return to what he regards as traditional values.

The man who once described China's leaders as "a group of appalling old waxworks", is imploring the country's government to re-think its development of Beijing. In particular, he has plans to save a historic area of pre-communist housing near Tiananmen Square.

The prince wants to save Da Shi Lan, an area of hutongs - low rise courtyard homes linked by alleys and teeming markets. He also wants to persuade the Beijing authorities to build thousands of new courtyard homes with the same traditional layout, instead of high rise concrete apartment blocks which have been used to accommodate China's rising urban population.

Robert Booth on Prince Charles' campaign to save historic Beijing Link to this audioThe intervention so close to Mao's mausoleum and the Great Hall of the People, could place Charles in conflict with the Chinese government, which is facing local opposition to the capital's rapid redevelopment in the run up to the Olympics. More than two thirds of the courtyard houses that existed in 1949 have been demolished leaving 1,000 today, according to the Beijing Cultural Heritage Protection Centre.

"Through his links with China the prince learned about the hutong housing being lost amid all this rapid development and he has offered his foundation's help," the prince's spokesman said. "It is not about criticising Chinese development per se, just about ensuring vulnerable heritage is not lost."

Designers at the Prince's Foundation for Architecture and Urbanism are working with Chinese businessmen and academics at Beijing's Tsing Hua University to save what remains of Da Shi Lan. Large areas of neighbouring hutongs have already been demolished and rebuilt as a major shopping and leisure project that has been criticised as an attempt to "Disney-fy" the old city.

The prince has never been to China, but became involved after he hosted a group of Chinese businessmen at Clarence House last autumn. They visited Poundbury, the neo-Georgian village built by the Prince in Dorset, and asked him to help them save the hutongs, some of which date back to the 15th century Ming dynasty.

The plan is likely to involve thinning out the existing over-crowded homes and the Prince's designers intend to show how the hutongs can be adapted as low-carbon alternatives to tower blocks which do not require air conditioning and reduce the need for polluting car journeys.

They also argue that the courtyard layout provides for a better social life than the more alienating tower blocks. Conservationists in Beijing have welcomed the Prince's involvement because it will boost the profile of their campaign to save the hutongs. The prince's designers have already held talks with Beijing's municipal government.

His decision to work in China is part of a new strategy of engagement, particularly around environmental issues, aides said. In February, the prince held talks with Tang Jiaxuan, the Chinese state councillor and Clarence House has secured rare permission to film inside the Forbidden City to make a documentary about part of its restoration.

"China is being sold the hi-tech model of development and we think there is a model with which works with the local character of Chinese planning to achieve sustainability," said Hank Dittmar, chief executive of the prince's foundation. "We want them to consider that too."

Today, the residents of Da Shi Lan cope with near slum-like conditions. The alleyways and communal toilets reek, laundry dries on wires hung outside ragged brick walls and the small homes are warmed with cakes of cheap coal. Rising damp is a regular complaint, but rent is as low as £1 a month.

The area is divided zones such as the "food district" and "coal district". Some buildings were guildhouses, others were centres for Confucian scholars who came to take examinations.

It is a long way from the glass and steel developments springing up just yards away where old market streets have become construction sites and the sound of hawkers plying their goods is mixed with the clang of hammers and the fizz of blowtorches.

"If anyone wants to help, they should just demolish this place and rebuild it," said a middle-aged woman as she filled a pot to boil some soup for her lunch. "The quality of our homes are so bad. Its dank and we even have to share a water tap with our neighbours."

"My home is poor quality as you can see for yourself, but I am used to it," said an elderly woman. "If I had to move, it would be inconvenient. But I know the young people all want to go."

Xu Zhenghua, a redundant factory worker said the prince's foundation faced difficult questions in their bid to improve the area. "I wonder how they can preserve the old buildings and still make them decent to live in," he said. "We don't have an independent kitchen or toilet and we need to sleep, eat, work and meet guests in one room. I think the best way to do it would be to move some of us out. If I received enough compensation for a three-bedroom apartment inside the third ring road, I would be more than happy to move."

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